These favorable results are a nice turnaround for Bristol Myers Squibb Co. (NYSE:BMY), which was forced to take a $1.8 billion writedown last year, after its experimental HCV drug caused heart failure in patients. Bristol Myers Squibb Co. (NYSE:BMY) acquired that ill-fated drug as part of its purchase of Inhibitex last February.
One major loser
While Gilead, AbbVie and Bristol Myers Squibb Co. (NYSE:BMY) seem well positioned for success once their drugs hit the market, a major loser in the HCV market is Idenix Pharmaceuticals Inc (NASDAQ:IDIX). Idenix Pharmaceuticals Inc (NASDAQ:IDIX) fell off a cliff on June 20 after it announced that planned clinical trials of its experimental HCV drug, the orally administered IDX20963, were halted pending the request of addition safety data by the FDA. IDX20963 is a lead uridine nucleotide prodrug candidate, also known as a “nuke.”
Although nukes are effective in other products, such as Gilead Sciences, Inc. (NASDAQ:GILD)’s aforementioned sofosbuvir (also known as PSI-7977), it is a hard combination to pull off safely. These nukes contain “a class of compounds where it’s very, very hard to make safe drugs,” according to Oppenheimer & Co. analyst David Ferreiro. Although IDX20963’s resemblance to Gilead’s sofosbuvir convinced some investors that Idenix could be the next Gilead, it appears that Gilead’s massive R&D department makes a world of difference in creating safer treatments.
Idenix’s recent failure marked the third time over the past year that safety concerns have halted the development of Idenix’s HCV drugs. Idenix Pharmaceuticals Inc (NASDAQ:IDIX) discontinued the development of its two other drugs in February as a result, causing shares to decline 67% over the past twelve months as a result.
The Foolish Bottom Line
Biotech investors should watch the HCV treatment race closely. For Gilead, a successful market release opens the floodgates to a massive revenue stream to complement its HIV treatments business, which is already the largest in the world. For AbbVie Inc (NYSE:ABBV), it is a chance for the newly formed company to make a name for itself and prove that it can stand on its own apart from Abbott Laboratories (NYSE:ABT). For other names in the field, such as Bristol Myers Squibb Co. (NYSE:BMY) and Pfizer Inc. (NYSE:PFE), the orally-administered HCV treatment market is an excellent chance to diversify their drug portfolios, which are constantly shifting with patent expirations and new clinical trials.
The article Three Future Winners and One Major Loser in the HCV Wars originally appeared on Fool.com and is written by Leo Sun.
Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Gilead Sciences. Leo is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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